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  • Wisconsin Lawyer
    March 31, 2008

    2001 Significant Court Decisions

    In his annual feature, the author highlights what he believes are significant Wisconsin Supreme Court and Court of Appeals decisions for the year 2001.

    Wisconsin Lawyer
    Vol. 75, No. 6, June 2002

    2 0 0 1: Significant Court Decisions


    In his annual feature, the author highlights what he believes are significant Wisconsin Supreme Court and Court of Appeals decisions for the year 2001.

    by Daniel W. Hildebrand

    * *

    Constitutional Law - Long-arm Statute

    Kopke v. A. Hartrodt S.R.L.1 involved a truck driver who was seriously injured when he opened a cargo container in Neenah, Wis. The injury occurred when a pallet loaded with paper fell out of the container onto Kopke. The paper had been shipped to Neenah from Italy. The manufacturer had contracted with L'Arciere, an Italian cooperative, to provide workers to load product into cargo containers. L'Arciere workers moved the pallets into the cargo containers and secured those containers using boards, beams, and inflated air bags. L'Arciere challenged jurisdiction over itself.


    Daniel Hildebrand Daniel W. Hildebrand is a shareholder of DeWitt Ross & Stevens S.C., Madison. He is a former president of the Dane County Bar Association and the State Bar of Wisconsin. He is a member of the ABA Standing Committee on Ethics and Professional Responsibility and is Wisconsin's state delegate to the ABA House of Delegates. He also is a member of the American Academy of Appellate Lawyers.

    The supreme court upheld the exercise of jurisdiction under Wisconsin's long-arm statute.2 The statute provides that Wisconsin courts have jurisdiction in any action claiming injury to person or property arising out of an act or omission outside Wisconsin, provided that products "processed" by the defendant are used or consumed within Wisconsin in the ordinary course of trade. The court held that L'Arciere had "processed" the products in the course of loading the cargo.

    The court also held that assertion of jurisdiction did not violate L'Arciere's rights to dueprocess of law because there were sufficient "minimum contacts" with Wisconsin. L'Arciere's routine loading of cargo containers for shipment to Wisconsin, a destination indicated on the plans for loading, were such that L'Arciere could reasonably anticipate being brought into court in Wisconsin. The court adopted the "stream of commerce" theory for application to this case. The cargo was introduced into the stream of commerce with the expectation that it would arrive in Wisconsin.

    Justices Crooks, Wilcox, and Sykes dissented. They argued that L'Arciere did not purposefully avail itself of the privilege of conducting activities within Wisconsin, invoking the benefits and protections of its law. It has not, and does not, do business in Wisconsin, nor does it have any office, employees, or property in Wisconsin. It engages in no solicitation activities in Wisconsin. The loading plans simply detail calculations of the weight of the containers and sketch their placement. The loading reports did not establish that L'Arciere was aware that the containers were headed for Wisconsin at the time of shipment.

    Revocation of Pro Hac Vice Admissions

    FilppulaMcArthur v. Halloin and Obey v. Halloin3 arose from two medical malpractice cases filed in Brown County. Lead counsel in each case was a Chicago lawyer admitted pro hac vice. In Filppula-McArthur, the trial court declared a mistrial after the lawyer asked questions eliciting testimony from the treating doctor relating to causation, in violation of the trial court's order that the treating doctor could not express expert opinions. The trial court accused the lawyer of revisiting virtually every decision that the court rendered, lack of knowledge of the procedural rules, and failures to heed the admonitions from the court. In Obey, the lawyer's pro hac vice admission was revoked by a different judge based on what occurred in Filppula-McArthur.

    Citing SCR 10.03(4), the court held that pro hac vice admissions may be revoked if the lawyer's conduct manifests incompetency to represent a client in a Wisconsin court or an unwillingness to abide by the rules of professional conduct for attorneys and the court's rules of decorum. Pro hac vice admissions, as well as revocations, are within the discretion of the circuit court. The supreme court upheld the circuit court's discretion, stating that the lawyer had evinced a lack of respect for the court and its orders. There was a basis to determine that the lawyer's unfamiliarity with Wisconsin's procedural rules evidenced incompetency to represent a client in a Wisconsin court. The trial judge's revocation in Obey also was upheld. The court also rejected, as inconsistent with SCR 10.03(4), a standard that the conduct must be egregious and that the client's interest should be considered.

    In Jensen v. Wisconsin Patients Compensation Fund,4 the supreme court held that a pro hac vice admission could not be revoked without a hearing. Attorneys should receive notice and opportunity to respond, for reasons of policy and sound judicial administration. The court did not reach constitutional issues.

    Insurance

    In Reid v. Benz,5 the supreme court held that attorney fees would not be awarded to an insured who established coverage. Attorney fees are awarded only when the insurer breaches its duty to defend. In Elliott v. Donahue,6 the supreme court had held that when an insurer fails to seek bifurcation of the coverage and liability issues and a stay of the liability phase, then the insurer breaches the duty to defend and is liable for attorney fees. Elliott does not permit recovery of attorney fees expended solely in establishing coverage when there has been no breach of the duty to defend. The so-called American rule provides that each party must pay its own attorney fees unless there is a contract or recognized exception for fee shifting.

    Justice Bablitch, with Chief Justice Abrahamson, dissented. Insurers have more than enough incentive to deny coverage for claims made against their insureds. They are in business to make a profit. Unfortunately, the majority opinion provides further incentive for insurers to refuse coverage in close cases involving claims against their insureds. This highly beneficial result for insurers is highly inequitable for insureds. Insurers will be motivated to deny all claims in close cases, knowing that under the worst case scenario they stand to lose nothing but their own attorney fees. It forces insureds to either pursue the costly alternative of contesting coverage or to pay the claim themselves because it will cost less than undertaking litigation to establish coverage.

    Constitutional Law - Threatening Speech

    The supreme court decided three cases involving whether or not threats made constituted "true threats" so as to subject the speaker to liability under criminal law. State v. Douglas D.7 arose while Douglas was an eighth grade student at an Oconto County public school. During a creative writing assignment, his teacher sent Douglas into the hall to complete his assignment because of disruptive behavior. In the assignment, Douglas characterized his teacher as an old ugly woman whose head was cut off when the teacher told a student named Dick to shut up. In State v. A.S.,8 a student reported that while she, A.S., and another girl were playing a computer game, A.S. made several statements that he was going to kill everybody at the middle school. Finally, in State v. Perkins,9 the defendant, while intoxicated and depressed, threatened to kill himself and then later stated that if he did that, he would first kill the local judge who had recently held him in contempt for failure to pay overdue child support.

    In each of these cases, the court held that the state must establish that a "true threat" had occurred. The test for a "true threat" appropriately balances free speech and the need to proscribe unprotected speech. The standard is an objective standard from the perspectives of both the speaker and the listener. A true threat is a statement that a speaker would reasonably foresee that a listener would reasonably interpret as a serious expression of purpose to inflict harm, as distinguished from hyperbole, jest, innocuous talk, expressions of political views, or other similarly protected speech. Although it is not necessary that the speaker have the ability to carry out the threat, the totality of the circumstances must be considered.

    In Perkins, the court held that the jury instructions were inadequate because the "true threat" concepts were not part of the instructions. Therefore, the conviction for violating Wis. Stat. section 940.203 (intentionally threatening to cause bodily harm to a judge when the threat is in response to an action taken in the judge's official capacity) was reversed. In A.S., the court held that the petition alleged a true threat as well as a violation of Wis. Stat. section 947.01 (disorderly conduct). In Douglas D., the court held that, while speech alone could constitute disorderly conduct, the creative writing paper did not constitute a true threat. Although the story Douglas wrote was crude and repugnant, there was no evidence that Douglas had threatened his teacher in the past or that his teacher believed that Douglas had a propensity for violence.

    Zoning

    In State v. Outagamie County Board of Adjustment,10 homeowners sought a variance to add a sun porch onto their home but were denied a building permit because their basement floor fell below the flood protection elevation required by the county's flood plain zoning ordinance. After they obtained a variance to allow the nonconforming basement to continue to exist, the state initiated certiorari review, contending that the basement was illegal and the variation was improperly granted. After the circuit court affirmed the issuance of the variance, the court of appeals reversed, noting the anomaly of using a zoning law, the purpose of which is to protect basements, to precipitate the likely regulatory destruction of one. The court of appeals relied upon State v. Kenosha County Board of Adjustment,11 which eliminated the previous distinction between area and use variances and established a "no reasonable use of the property" standard for the issuance of either type of variance.

    Three justices joined in the lead opinion, arguing that Kenosha County should be overruled. Before Kenosha County, area variances had been governed by the "unnecessarily burdensome standard." The Kenosha County "no reasonable use of the property" standard is much stricter. Kenosha County made it virtually impossible to get a zoning variance of any kind, robbing boards of adjustment of the discretion explicitly vested in them by the Legislature as a hedge against individual injustices that occasionally result from the application of otherwise inflexible zoning regulations. Under Kenosha County, if an area variance applicant has any reasonable use of his or her property without a variance, a hardship will not exist and no variance can be issued. Under the standard that should be applied, the board's finding of unnecessary hardship is sufficient to justify a variance.

    Justices Crooks and Wilcox concurred, seeing no reason to overrule Kenosha County. In this case, the board proceeded on a correct theory of the law in concluding that it was estopped from not issuing the variance because the hardship had been caused by the town's issuance of a building permit. The board did not apply Kenosha County to grant the variance in this case.

    Chief Justice Abrahamson and Justice Bradley dissented. They emphasized that the case was not about the destruction of a basement but rather whether or not the home will have a sun porch. The case really turns on whether to undermine the DNR's authority to regulate flood plains and whether to ignore the principles of stare decisis in order to allow a homeowner to build a sun porch. Kenosha County should not be overruled. The statutes provide no basis for distinguishing area and use variances, all of which are subject to the "unnecessary hardship" standard.

    Criminal Law

    In State v. Lindell,12 the supreme court overruled State v. Ramos13 and held that a trial court's error in failing to strike a biased juror for cause would not result in an automatic reversal of a conviction. Ramos held that the use of a peremptory challenge to correct a trial court error in failing to strike a biased juror for cause justifies a reversal of the conviction. An error in refusing to strike a biased juror for cause must be evaluated on whether or not the error has affected the substantial rights of the defendant. Substantial rights of a defendant are not affected or impaired when a defendant chooses to exercise a single peremptory strike to correct a circuit court error in failing to remove a juror for cause. An additional reason for overruling Ramos is that a defendant is not required to use a peremptory challenge to correct the error of a trial court in refusing to excuse a juror for cause. A defendant convicted by a jury, with a biased member of the jury on the panel, retains a right to appeal on that basis. Overruling Ramos does not prevent a defendant from obtaining a reversal when a circuit court judge repeatedly and deliberately misapplies the law to force a defendant to use peremptory challenges or when the court makes errors that force a defendant to use most or all of his or her peremptory strikes to strike jurors who should have been stricken for cause.

    Other Significant Cases

    Space does not permit a more complete discussion, but the holdings of these other informative cases are summarized below.

    Torts

    Lewis v. Physicians Ins. Co., 2001 WI 60, 243 Wis. 2d 648, 627 N.W.2d 484 (surgeon as "captain of the ship" is not liable for negligence of nurses employed by hospital).

    Rabideau v. City of Racine, 2001 WI 57, 243 Wis. 2d 486, 627 N.W.2d 795 (refused to recognize tort of emotional distress for a person who witnessed death of her dog).

    Matthies v. Positive Safety Mfg. Co., 2001 WI 82, 244 Wis. 2d 720, 628 N.W. 842 (Wis. Stat. § 895.045(1), limiting joint and several liability, unconstitutional as applied to accidents occurring before effective date of the statute); Fuchsgruber v. Custom Accessories Inc., 2001 WI 81, 244 Wis. 2d 758, 628 N.W.2d 833 (Wis. Stat. § 895.045(1) does not apply to strict product liability actions).

    Koffman v. Leichtfus, 2001 WI 111, 246 Wis. 2d 31, 630 N.W.2d 201 (recovery of reasonable value of medical services in light of collateral source and subrogation rules).

    Corporations

    Community Nat'l Bank v. Medical Benefit Adm'rs, 2001 WI App 81, 242 Wis. 2d 626, 626 N.W.2d 340 (fiduciary duty of receiver).

    Jorgensen v. Water Works Inc., 2001 WI App 135, 246 Wis. 2d 614, 630 N.W.2d 230 (fiduciary duty of directors to deal fairly with shareholders).

    United Catholic Parish Schs. v. Card Serv. Ctr., 2001 WI App 229, 248 Wis. 2d 463, 636 N.W.2d 206 (bank that accepted fraudulent payment of credit card balances from proceeds of checks was a holder in due course).

    Employment Law

    Mackenzie v. Miller Brewing Co., 2001 WI 23, 241 Wis. 2d 700, 623 N.W.2d 739 (tort of intentional misrepresentation not allowed in employment at will cases).

    Family Law

    Long v. Ardestani, 2001 WI App 46, 241 Wis. 2d 498, 624 N.W.2d 405 (former husband allowed to take children to Iran).

    Journal Sentinel Inc. v. Schultz, 2001 WI App 260, 248 Wis.2d 791, 638 N.W.2d 76 (marital property agreement does not shield husband from garnishment of tortfeasor wife's marital property interest in his earnings).

    Probate

    In re Estate of Toutant, 2001 WI App 181, 247 Wis. 2d 400, 633 N.W.2d 692 (marriage of decedent declared null and void).

    Insurance

    Allied Processors v. Western Nat'l Mut. Ins. Co., 2001 WI App 129, 246 Wis. 2d 579, 629 N.W.2d 329 (attorney fees to establish bad faith and fees of expert witnesses may be recovered).

    Vandenberg v. Continental Ins. Co., 2001 WI 85, 244 Wis. 2d 802, 628 N.W.2d 876 (homeowner's policy covered child care provider in spite of business activity exclusion).

    Constitutional Law

    Professional Police Ass'n v. Lightbourn, 2001 WI 59, 243 Wis. 2d 512, 627 N.W.2d 807 (constitutionality of changes to state retirement system).

    Procedure

    Schultz v. Sykes, 2001 WI App 255, 248 Wis. 2d 746, 638 N.W.2d 604 (imposing sanctions for subornating perjury within inherent power of the court).

    Bank of Sun Prairie v. Marshall Dev. Co., 2001 WI App 64, 242 Wis. 2d 355, 626 N.W.2d 319 (prior judgment on note does not preclude later action to foreclose).

    Waters v. Pertzborn, 2001 WI 62, 243 Wis. 2d 703, 627 N.W.2d 497 (bifurcated trials cannot be conducted before separate juries).

    Evidence

    Crawford v. Care Concepts Inc., 2001 WI 45, 243 Wis. 2d 119, 625 N.W.2d 876 (privilege does not apply to records involving assault of other patients or health care workers).

    Landlord-tenant

    Baierl v. McTaggart, 2001 WI 107, 245 Wis. 2d 632, 629 N.W.2d 277 (lease is unenforceable against the tenant if it includes a clause prohibited by Wis. Admin. Code § ATCP 134.08(3)).

    Employment Benefits

    Pritchard v. Madison Metro. Sch. Dist., 2001 WI App 62, 242 Wis. 2d 301, 625 N.W.2d 613 (city can provide health benefits to designated family partners).

    Criminal Law

    State v. Canon, 2001 WI 11, 241 Wis. 2d 164, 622 N.W.2d 270 (acquittal of crime does not bar subsequent charge of perjury).

    State v. Oakley, 2001 WI 103, 245 Wis. 2d 447, 629 N.W.2d 200, modified on rehearing, 2001 WI 123, 248 Wis. 2d 654, 635 N.W.2d 760 (order not to have children upheld as a condition of probation).

    State ex rel. Kaminski v. Schwarz, 2001 WI 94, 245 Wis. 2d 310, 630 N.W.2d 164 (probation officer can require sex offender to notify neighbors of his status).

    Endnotes

    1Kopke v. A. Hartrodt S.R.L., 2001 WI 99, 245 Wis. 2d 396, 629 N.W.2d 662.

    2Wis. Stat. § 801.05(4)(b).

    3Filppula-McArthur v. Halloin, 2001 WI 8, 241 Wis. 2d 110, 622 N.W.2d 436.

    4Jensen v. Wisconsin Patients Compensation Fund, 2001 WI 9, 241 Wis. 2d 142, 621 N.W.2d 902.

    5Reid v. Benz, 2001 WI 106, 245 Wis. 2d 658, 629 N.W.2d 262.

    6Elliott v. Donahue, 169 Wis. 2d 310, 485 N.W.2d 403 (1992).

    7State v. Douglas D., 2001 WI 47, 243 Wis. 2d 204, 626 N.W.2d 725.

    8State v. A.S., 2001 WI 48, 243 Wis. 2d 173, 626 N.W.2d 712.

    9State v. Perkins, 2001 WI 46, 243 Wis. 2d 141, 626 N.W.2d 762.

    10State v. Outagamie County Bd. of Adjustment, 2001 WI 78, 244 Wis. 2d 613, 628 N.W.2d 376.

    11State v. Kenosha County Bd. of Adjustment, 218 Wis. 2d 396, 577 N.W.2d 813 (1998).

    12State v. Lindell, 2001 WI 108, 245 Wis. 2d 689, 629 N.W.2d 223.

    13State v. Ramos, 211 Wis. 2d 12, 564 N.W.2d 328 (1997).



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